​Middle-skill jobs in the United States have fallen over the past three decades. These jobs involve performing routine tasks like bookkeeping, clerical work, and repetitive production tasks (“lever pulling” jobs). As computer and communication technologies have improved in quality and declined in price, these tasks have been increasingly codified in computer software and performed by machines.

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Technology advancement has led to an increase in labor demand for nonroutine tasks that require high-skilled workers (e.g. problem solving) and low-skilled workers (e.g. manual tasks). This employment phenomenon where job opportunities have shifted away from middle-skill jobs toward high- and low-skill jobs is called “job polarization."

In addition, U.S. education levels have not kept up with the rising demand for skilled workers, thereby increasing the value of educated workers. At the same time, low-skilled workers have moved into service occupations that generally pay low wages. Both factors have contributed to an increase in wage inequality as middle-skill jobs disappear while high- and low-skill jobs increase.

If routine manufacturing jobs are eliminated by automation, forcing workers with medium skills into the service industry, and if the majority of workers with medium skills have no or only some post-secondary education, how can the U.S. solve the structural problem facing the labor market?

The answer is by increasing both the numbers of college-educated workers and training programs in high schools. These would lead to an increase in productivity and higher wages, resulting in a decline in wage inequality.

2017-11-30T06:00:00Z

https://www.recenter.tamu.edu/info/blog/?Item=110

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